Despite Negative Campaign Charges, We Like Cummins' 1Q Earnings
We are maintaining our $164 fair value estimate after narrow-moat Cummins' first-quarter earnings. Adjusted EPS rose 40% to $3.30 from the prior year, beating consensus by $0.36, or 12%. While the company beat its expectations on both the top and bottom lines, we believe the stock was negatively affected after the report by a $187 million charge related to issues with aftertreatment components and certain on-highway products produced between 2010 and 2015 in North America. Excluding this charge,...Cummins is a diesel engine manufacturer. The company's segments include: Engine, which manufactures and markets a range of diesel and natural gas powered engines; Distribution, which is the company's primary sales, service, and support channel; Components, which supplies aftertreatment systems, turbochargers, transmissions, filtration products, electronics and fuel systems for commercial diesel and natural gas applications; Power Systems, which includes power generation, industrial, and generator technologies product lines; and New Power, which designs, manufactures, sells and supports electrified power systems ranging from fully electric to hybrid, along with components and subsystems.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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